On defence procurement, Canada is a ‘boy scout’ no more: Finley

A few weeks after she and Rob Nicholson introduced the Harper government’s new three-pronged Defence Procurement Strategy (DPS), Public Works Minister Diane Finley delivered a clear message on Wednesday: the Conservatives are wholeheartedly embracing industrial policy in the defence sector.

As they simultaneously try to balance that with another prong of the DPS, however, the commitment to get the “right equipment” to the Canadian Armed Forces and Canadian Coast Guard in a timely manner and at a reasonable price, it’s worth asking how the competing goals will be reconciled.

Hearing Finley speak at a symposium on defence procurement at Ottawa’s Chateau Laurier Wednesday, it was difficult not to notice something of a contradiction.

While Finley assured that the main goal of the DPS will always be to provide Canada’s men and women in uniform with the equipment they need on time and on budget, she also called the strategy’s new Value Proposition one of its “most significant changes.”

The goal of the Value Proposition, a government backgrounder informs euphemistically, is to motivate investors to “put forward their best industrial plan for Canada.”

In Finley’s words, “companies whose bid proposals demonstrate a willingness to invest in Canada in a meaningful manner, through the transfer of intellectual property, the creation of high-paying jobs, innovation-related activities, and
export development and growth, may have a competitive advantage in the bid evaluation.”

In January, however, a group of defence procurement experts told a Canada 2020 panel that Canada has become a leader in in-service support as a result of decades of military underfunding, meaning it’s become better at fixing things than building them.

That might make it difficult for the government to ‘leverage purchases of defence equipment to create jobs…in Canada’, as the DPS aspires to do, since the country might not have the expertise required for those new jobs.

That might be something the government’s new arms-length Defence Analytics Institute, also part of the DPS, could help them work through.

Whatever they determine, however, it’s certain that the DPS will give the government all the flexibility it needs to rule out bids on an ad hoc or “procurement-by-procurement basis.”

The new Value Proposition, for example, will have a default weighting of 10 per cent when the government evaluates procurement bids, but that percentage can change with each evaluation.

“Where the Government chooses to specify a targeted, desired industrial outcome, Mandatory Requirements will be used, as appropriate,” the government backgrounder further explains — which kind of sounds like the government can more or less make it up as they go.

Scrumming with reporters following her speech on Wednesday, Finley was blunt about the Harper government’s need to support Canadian industry in a global defence procurement environment that’s both cutthroat and rule-less.

“Defence is one of the few sectors that is exempt from regulation within the world, in terms of free trade… recognizing the sovereignty issues with defence procurement,” she said.

(The WTO’s Government Procurement Agreement, for example, has an exemption for “procurement indispensable for national security or for national defence purposes”.)

“Many another countries have already — in fact most of the Western world have developed a strategy similar to our Defence Procurement Strategy, that we announced two weeks ago,” Finley added.

“It’s time Canada stopped being a boy scout and started stepping up to the plate in support of Canadian industry.”